Baron Funds, an investment management firm, released its “Focused Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund continued to generate robust absolute and relative results in the fourth quarter. The fund increased 14.49% (Institutional Shares) in the quarter outperforming the Russell 2500 Growth Index’s (the Benchmark) 2.43%. Please spare some time to check the fund’s top 5 holdings to know more about their top bets for 2024.
In its fourth quarter 2024 investor letter, Baron Focused Growth Fund emphasized stocks such as Red Rock Resorts, Inc. (NASDAQ:RRR). Headquartered in Las Vegas, Nevada, Red Rock Resorts, Inc. (NASDAQ:RRR) develops and operates casino and entertainment properties. One-month return of Red Rock Resorts, Inc. (NASDAQ:RRR) was 11.34%, and its shares lost 7.42% of their value over the last 52 weeks. On February 19, 2025, Red Rock Resorts, Inc. (NASDAQ:RRR) stock closed at $52.90 per share with a market capitalization of $5.427 billion.
Baron Focused Growth Fund stated the following regarding Red Rock Resorts, Inc. (NASDAQ:RRR) in its Q4 2024 investor letter:
“Red Rock Resorts, Inc. (NASDAQ:RRR) is a casino owner focused on the Las Vegas Locals market. Shares fell on a slowdown in the market and cannibalization by its new Durango casino, which has had a larger-than-expected impact on its other casinos. We remain shareholders. The Durango casino continued to attract more visitors and is already generating 20% returns on invested capital. Red Rock is using the cash flow to add parking, hotel rooms, and an expansion of the casino and is also looking to renovate some older casinos with an eye toward an expected market rebound over the next few years. The Las Vegas population is growing at a low single-digit rate, which, when combined with inflationary pricing and recent renovations, should lead to high single-digit growth in EBITDA. Management has been buying stock at current levels, suggesting the stock is attractively valued.”
A picturesque sunset view of the Graton Resort & Casino, with patrons gambling in the background.
Red Rock Resorts, Inc. (NASDAQ:RRR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held Red Rock Resorts, Inc. (NASDAQ:RRR) at the end of the fourth quarter compared to 24 in the third quarter. While we acknowledge the potential of Red Rock Resorts, Inc. (NASDAQ:RRR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed Red Rock Resorts, Inc. (NASDAQ:RRR) and shared Diamond Hill Small Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.